TRADE CALL RECAP
For our last live trade call, we were watching the US CPI report this morning. We were looking to sell the EURJPY if the number came out at least 0.1% worse than expected, but I suggested trading smaller lots because of additional data and the fact that this release has not had as much of an impact on the market recently. The actual number came out 0.1% worse than expected so it met our safe trigger and we entered a trade. After a quick 10-15 point spike the EURJPY came back up and hovered around most traders’ entry price. Most traders reported small gains or losses of up to 10 pips or they closed at breakeven. The video of this trade is below.
httpv://www.youtube.com/watch?v=_KXN57ZSmaU
OUR NEXT LIVE ON THE NEWS TRADE CALLS
Tomorrow we will have two opportunities for a trade when the UK Retail Sales and Canadian CPI reports are released. Our first opportunity comes when the UK Retail Sales report is released at 4:30 am EST. For this release we will focus on the Retail Sales (MoM) figure, and the expected number for this report is 0.5%. We will be looking for a deviation of at least 0.4% on this report to trigger a safe trade. A higher than expected number will be good for the GBP and signal a long on the GBPUSD, and a lower than expected number will be bad for the GBP and signal a short on the GBPUSD.
I would prefer to see a sell trigger on this particular release as it could affect the GBP more if the number comes out worse than expected, especially if it’s a negative number. However, we could still see a 20-40 pip move if the safe buy trigger is met. I will most likely close the entire trade with 20-40 pips if we get a buy trigger. If we get a sell trigger and get a move of 30-40 pips, I will most likely close a portion of the trade and then lock in and hold the other portion of the trade for an even larger potential move.
The UK Retail Sales has met our safe trigger in eight out of eleven months this year, and the GBPUSD has moved between 25 and 80 pips each time, except for a couple of times in which there were extenuating circumstances. The last time this release met our safe trigger was October, and traders reported up to 50 pips of profit on the trade. The chart below shows how the GBPUSD reacted to October’s release:
The video of October’s trade can be seen below:
httpv://www.youtube.com/watch?v=S_QxMMug_LQ
Our second opportunity comes when the Canadian CPI report is released at 7:00 am EST. There are several components to this release, and we will be focusing on the CAD CPI Excluding Core 8 (YoY) figure. The expectation for this report is 1.3%. We will be looking for a deviation of 0.2% to trigger a safe trade. A lower than expected number will trigger a buy on the USDCAD or EURCAD.
Although the USDCAD and even the EURCAD seem to be trading in a channel recently, they could be poised for a breakout. Our focus on this particular release will be biased for a buy on the USDCAD and even the EURCAD, but we could see a 15-30 pip spike either way if it meets our trigger. We will use caution on this particular release as it has gone the wrong direction a few times recently. We may even decide to raise our safe trigger to 0.3%.
This report last met our safe trigger in June, and the USDCAD only dropped about 10-15 and stalled so we recommended closing the trade with small profits. We had traders report profits of 5-10 pips on this particular trade. The chart below shows how the USDCAD reacted at the time of June’s release:
We do not have a video of June’s release, so to see a video of last December’s trade, click on the link below:
http://www.forextradersdaily.com/vid/CADCPI121908/
This is our current outlook for these trades; however, it is subject to change as market conditions may change by tomorrow. Be sure to log in to the Live Trade Room 15 minutes prior to the releases to get my commentary on these potential trades.
Good Luck!!!!
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